U.S., Mexico said to be near NAFTA deal
Trade analysts say Canada yet to jump aboard revised pact
WASHINGTON — The Trump administration is close to striking a deal with Mexico on a revamped North American Free Trade Agreement, analysts said, but thorny issues are yet to be resolved with Canada, the third party in the trilateral pact.
Reaching an agreement with Mexico would mark a breakthrough for the administration after a year of roller-coaster talks and tension with its longtime North American trading partners. President Donald Trump has frequently threatened to withdraw from NAFTA, linked the renegotiations to his call for a wall along the U.S.-Mexican border and slapped tariffs on Mexican and Canadian steel to apply U.S. trade representative Robert Lighthizer, left, has shown some flexibility as he deals with Mexico on a revised pact. pressure to make concessions.
But Mexico and the U.S. have incentives to push through a deal quickly. Mexico wants to lock in an agreement before its new leftist president takes office, and the White House is keen on achieving a win on trade ahead of the midterm elections.
Canada, meanwhile, has shown less urgency to complete a revision of the 24year-old pact, but is expected to return to the bargaining table once the U.S. and Mexico settle their differences.
And then the question will be “whether Canada is finally willing to re-engage in the process, sign off on what has been agreed and quickly resolve any key outstanding issues of concern to Canada,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.
Trump’s trade negotiators have been meeting with Mexican officials in Washington, and sources familiar with the discussions say the sides have largely agreed to new rules on auto trade — a top priority for the White House — that could boost investment in the U.S. and curb a flight of domestic production and jobs to Mexico.
In exchange, the U.S. trade representative, Robert Lighthizer, appears to be showing flexibility on an earlier demand for an automatic five-year termination of NAFTA and a proposal to make it easier for the U.S. to press anti-dumping claims against seasonal produce like tomatoes from Mexico.
Multilateral trade nego- tiations typically include bilateral talks between nations, but the administration’s strategy to close a deal first with Mexico — without parallel discussions with Canadian officials — is unusual and could backfire.
“I think the Trump administration is playing a risky game if you have a final deal with Mexico and you present it (to Canada) as a fait accompli,” said Daniel Ujczo, an international trade lawyer who specializes in Canada-U.S. affairs at the law firm Dickinson Wright.
It’s all the more risky because of the short time frame in which Mexico and the U.S. are looking to seal a trilateral agreement.
U.S. congressional rules on trade require that there be a 90-day period between the administration’s notification of a deal and the actual signing of an agreement. Mexico’s new president, Andres Manuel Lopez Obrador, was elected in July and takes the oath of office Dec. 1. That means a NAFTA agreement would need to be announced by the end of August to allow for the 90 days to pass and for the current Mexican president, Enrique Pena Nieto, to sign the pact before Lopez Obrador takes office.
But that leaves only about two weeks for Lighthizer and his team to reach an accord with their Canadian counterparts. And by most accounts, that will be tough to do.
Even if Canada signs on by month’s end and there’s a three- way preliminary agreement, in the U.S., that would only begin a lengthy process that includes a period of public review and economic assessment by the U.S. International Trade Commission. A revised NAFTA wouldn’t be voted on by lawmakers until next year at the earliest, when a new Congress is seated.